Florida Leads Race to the Bottom on Unemployment Compensation
October 23rd, 2012 | Kenneth Quinnell
Americans faced with a tough economy face significant struggles when they lose their jobs. Since the 1930s, workers who are without jobs through no fault of their own have had the safety net of the unemployment compensation program to serve as a backup plan until they get back on their feet. Under new rules implemented by Florida Gov. Rick Scott and his allies in the state legislature, it is getting harder and harder for working families who have lost their jobs to obtain the unemployment compensation that they have earned.
Florida’s unemployment compensation system was already one of the toughest in the nation before Republicans revised the rules to make it even more difficult for workers who have hit tough times to receive vital financial resources. Unlike any other state’s system, applicants are now required to apply online, with no option available for those who do not have Internet access to complete the application. Historically, applicants could use a call-in system to complete the requirements, but that option has been eliminated. The legislation was originally sponsored by state Rep. Doug Holder, (R).
“Florida’s revised procedures make it just about as difficult as possible for unemployed workers to access unemployment insurance now,” said Valory Greenfield, staff attorney at Florida Legal Services.
The effect is that the state is blocking workers from accessing help they are qualified for and twisting the knife in the state’s ailing economy. Nowhere in the country is it this hard to get help when you lose a job.
The online application also now requires a 45-question skills review, asking questions about applied mathematics, reading for information and locating information. The skills test is not available for review as the governor’s administration claims it is “proprietary.” This means, there is no way to independently verify that the test is a valid measure of worker skills. Scott’s office claims that the review is a “common sense” reform designed to create a more skilled workforce, but in reality, the review serves to discourage Floridians from completing the application. The denial rate for applications jumped more than 66% in the first three months of 2012. Other new rules require those who receive compensation to provide documentation that they have applied to a minimum of five jobs per week. The new rules also reduced the maximum number of weeks of that someone can be in the system from 26 weeks to 23. More dangerously for Floridians, is the fact that the legislation pegs the number of weeks workers can receive compensation to the unemployment rate, dropping the number of weeks all the way down to 12 if the state’s unemployment rate drops below 5%. That could certainly cause problems for workers in any fields that are not in line with the overall employment situation and does not allow for flexibility to deal with the complexities of the state’s diverse economy. The shorter duration of compensation offered by Florida could also diminish federal benefits that workers receive, since the federal benefits are tied to the compensation that states give. Florida’s average payment is $230 a week, with a maximum of $275—both among the lowest in the nation.
Scott renamed the program the “Reemployment Assistance Program” and cut the tax that funds the program by $800,000. The funding cuts have led to a logjam in the system as the call volume for the staff whose job it is to help applicants through the process is very high. There are numerous reports of people calling for assistance and never getting any help as calls go unanswered for days. Reporters who attempted to call into the system for help said that automated messages told them that there were hundreds of calls ahead of them in the queue and that the system hung up on them without them ever having talked to a human being. The cuts to the tax that funds the program have led to a massive deficit where the state borrowed $2.7 billion from the federal government to cover shortfalls.
Applicants also complain that the state’s website contains misinformation about the program and that it is difficult to navigate. Failure to complete any portion of the application or skills test results in delays in compensation or outright rejection of access to the program. Frequently, those who face delays or rejection are not even told that they have failed to complete the full process and they can wait weeks without knowing why they are not being paid. The new rules also allow the state to deny compensation to workers for their actions that take place outside of work and have no connection to any job.
The effect of the new rules has been dramatic—hundreds of thousands of unemployed workers have lost compensation that they have earned at a time when they most need it. Florida now has the lowest rate of unemployed citizens who receive jobless benefits, with a mere 15% of eligible Floridians receiving compensation. That rate is much lower than the national rate of 27%. Only one-third of applicants ever receives any money, despite the fact that the program costs taxpayers no money and unemployment compensation is part of the benefits package that employees receive from their employers. Nationally, 29% of first-time applicants are denied compensation. The rate in Florida is more than 50%.
After a complaint was filed by Florida Legal Services and the National Employment Law Project, the United States Labor Department is investigating the new rules to determine whether or not they are illegal and require an undue burden on the jobless.
“This complaint is not challenging Florida’s right to operate an unemployment insurance program that already pays some of the lowest benefits in the country. Rather, this complaint is saying that no state, including Florida, is free to erect procedural barriers that keep otherwise eligible workers from accessing unemployment insurance,” said George Wentworth, senior staff attorney at the National Employment Law Project.
States receive federal grants to administer their unemployment insurance programs, and one of the conditions for those grants is that they have procedures in place that facilitate the prompt payment of benefits to workers who meet basic eligibility criteria. Florida’s new procedures force workers who already satisfy the basic eligibility requirements to jump through additional hoops in the form of complex online transactions. Thousands of workers are being unfairly disqualified as a result. We are asking the U.S. Department of Labor to investigate and find that Florida’s procedures are in violation of federal law.
Gov. Scott frequently uses the drop in Florida’s unemployment compensation recipients as a talking point about how his policies have improved the economy, despite the fact that the largest reasons for the drop is recipients reaching their maximum number of weeks and being ineligible for further compensation, or people getting frustrated with the system and giving up—not finding new jobs. Florida has a higher unemployment rate than the national average and approximately 800,000 residents of the state are currently without work.
This post originally appeared in AFL-CIO NOW on October 22, 2012. Reprinted with permission.
About the Author: Kenneth Quinnell is senior writer for AFL-CIO. He is originally from Florida and is the father of three sons. He can be reached at Kquinnell@aflcio.org.